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Could anyone point me in the right direction to find out more about accounting for a speculative property developer?

I just can't find any literature and the FRSSE doesn't help me much thus far either.

For example, the motive is to make a profit from the sale of the eventual properties. Therefore one would assume that the direct costs are not capitalised into an asset. But then the development will incur large losses at the start to be carried forward for when the property is, hopefully, sold. But is this right? I am thinking the capitalised version would be correct. And then, what if a buyer is found and monies are transferred before the property is finished? Would this be deferred income in accordance with accruals? If so, when would it be released?

As you can see, I have a million questions and I am very keen to learn more on this topic so I would sincerely appreciate any guidance or pointers in the right direction. Please no "ask your accountant" responses.

By Dr and Cr Finished Goods you only show the gross profit - accounts need to show turnover and cost of sales as separate lines. Further more we usually used "Finished goods" as a stock description, not a cost description.

If you if have the time and the inclination carnmores I would be very interested to read about what would happen in the scenario a PD were to hold the constructed property as an investment.

Without doing any research I am thinking that the WIP would be capitalised into investment property and potentially an adjustment be made for the fair value of the property - this is reminding me of the relevant international accounting standards. Nonesense that is off the top of my head and probably incorrect.

Suggest you need to know absolutely everything about the "sale" of the property before you can make a decision on how to account for any of the associated revenue in advance of completion. This does not just include the sale contract but also any related contracts, side letters, you even have to ask if there have been any verbal agreements. You also need to ascertain if the buyer is credit worthy for the total sums involved.

as far as the sale goes, you need to understand the fundamental difference between a promise to purchase and an unconditional legal offer made to purchase. You only recognise revenue when you have an unconditional sales contract.

If you have the buyers "signed up" then you are in the realms of long term contracts....which is a whole different question.

I would then refer to the real accountants to offer advice on how you account for stock that becomes a LTC.